notice concerning third-party allotment of the new shares
Post on 18-Dec-2021
1 Views
Preview:
TRANSCRIPT
(Note) This document has been translated from the Japanese original for reference purposes only. In the event of
any discrepancy between this translated document and the Japanese original, the original shall prevail.
September 28, 2016
Company name: Tokuyama Corporation
Representative: Hiroshi Yokota,
President and Representative Director
(Code No. 4043, First Section TSE)
Contact: Taro Kobayashi, General Manager
Corporate Communications & Investor Relations Dept.
TEL: +81-3-5207-2552
Notice concerning Third-Party Allotment of the New Shares and Transfer of the Shares of
Consolidated Subsidiary
With a resolution at a meeting of Board of Directors held today, Tokuyama Corporation (hereinafter referred
to as the “Company,” “Tokuyama” or “we”) hereby announces that the Company’s consolidated subsidiary in
Malaysia, Tokuyama Malaysia Sdn. Bhd. (hereinafter referred to as “Tokuyama Malaysia”) will issue new
shares to OCI Company Ltd. in Korea (hereinafter referred to as “OCI”) as a third-party allotment and the
Company will transfer all shares of Tokuyama Malaysia to OCI.
As a consequence of the above-mentioned transactions, Tokuyama Malaysia will be excluded from the
consolidation of the Company.
1. Reason for the Third-Party Allotment of New Shares and Transfer of Shares
Tokuyama Malaysia was established in August 2009 to expand the semiconductor-grade and solar-grade
polycrystalline silicon business. Due to the technological issues of manufacturing facilities and deteriorating
market condition of solar-grade polycrystalline silicon, two huge impairment losses in connection with plants
were posted. To continue Tokuyama Malaysia’s business, the efforts to improve the manufacturing facilities
and the productivity were taken, and certain level of productivity has been achieved. In addition, to further
strengthen Tokuyama Malaysia’s business structure, the Company has been evaluating every option including
Tokuyama Malaysia’s alliance with other company.
As a result, the Company has reached to the conclusion that transferring the business of Tokuyama Malaysia
to OCI, a global player of solar power business including the production of polycrystalline silicon, will be the
best choice for parties, and finally the Company reached an agreement with OCI about the third-party
allotment of new share and transfer of shares of Tokuyama Malaysia to OCI.
1
2. Outline of the consolidated subsidiary whose shares are to be transferred
(1) Name Tokuyama Malaysia Sdn. Bhd.
(2) Location Samalaju Industrial Park, Sarawak, Malaysia
(3) Name and Title of
Representative
Hiroshi Nomura (President and Representative Director)
(4) Business Production and sale of polycrystalline silicon
(5) Capital 6,567 million yen
(6) Date of Establishment August 18, 2009
(7) Major Shareholder and
Ratio of Shareholding
Tokuyama Corporation 100%
(8) Relationships between
the Parties
Capital
Relationship
Relevant company is Tokuyama’s consolidated
subsidiary and Tokuyama’s ratio of shareholding is
100%.
Personnel
Relationship
One executive officer and four employees of
Tokuyama serve five board members of the relevant
company concurrently. No related parties or affiliates
of Tokuyama have any significant personnel
relationship with the relevant company.
Transaction
Relationship
Tokuyama is lending the fund to the relevant company.
(9) Results of Operations and Financial Conditions for Previous Three Fiscal Years
(Expressed in millions of Japanese Yen unless otherwise specified)
Fiscal Year Ended March 2014 March 2015 March 2016
Net Assets 126,355 32,582 (101,551)
Total Assets 208,965 148,936 22,298
Sales - 4,387 8,849
Operating Loss (952) (4,344) (10,298)
Ordinary Loss (2,099) (6,987) (11,449)
Net Loss (2,099) (93,772) (135,475)
3. Outline of the other party of the third-party allotment and the share transfer
(1) Name OCI Company Ltd.
(2) Location 94, Sogong-ro, Jung-gu, Seoul, Korea
(3) Name and Title of
Representative
Lee Woo Hyun (President and Representative Director)
(4) Business Production and sales of inorganic chemicals, petro and coal chemicals,
fine chemicals, and raw materials for solar panels
(5) Capital 127,247 million Korean Won
(6) Date of Establishment August 5, 1959
2
(7) Net Assets 3,242,206 million Korean Won
(8) Total Assets 7,298,775 million Korean Won
(9) Major Shareholders and
Ratios of Shareholdings
Lee Soo-Young 10.92 %, National Pension Service 10.33 %,
Samsung Asset Management Company, Ltd. 6.44%,
Lee Hwa-Young 5.43%, Lee Bok-Young 5.40%
(10) Relationships between
the Parties
Capital
Relationship
Tokuyama and the relevant company have no
significant capital relationship.
Personnel
Relationship
Tokuyama and the relevant company have no
significant personnel relationship.
Transaction
Relationship
Tokuyama and the relevant company have no
significant transaction relationship.
Status as a
Related Party
The relevant company does not belong to Tokuyama’s
related parties.
4. The outline of third-party allotment
(1) Number of shares to be issued First allotment 50,000,000 shares
(Tokuyama’s shareholding after the first allotment: 83%)
Second allotment 210,000,000 shares
(Tokuyama’s shareholding after the second allotment: 49%)
(2) Amounts of procurement funds USD 24 million (first allotment)
USD 78 million (second allotment)
(3) Allottee OCI Company Ltd.
(4) Payment date First allotment October 7, 2016 (planned)
Second allotment March 31, 2017 (planned)
* The third-party allotment and share transfer to OCI will be subject to the acquisition of permission of
notification or the like regarding business combination from competition authorities of the relevant
countries.
5. The number of shares to be transferred and the status of the shares before and after the transfer
(1) Number of shares before the transfer 252,356,839 shares (Tokuyama’s shareholding: 49%)
(2) Number of shares to be transferred 252,356,839 shares
(3) Transfer price USD 98 million
(4) Number of shares after the transfer 0 shares (Tokuyama’s shareholding: 0%)
6. Timetable
(1) Resolution of the Company’s Board of Directors relating to the
transfer of shares
September 28, 2016
(2) Conclusion of share transfer agreement September 29, 2016 (planned)
(3) OCI’s payment for third-party allotment (First allotment) October 7, 2016 (planned)
3
4
(4) OCI’s payment for third-party allotment (Second allotment) March 31, 2017 (planned)
(5) Share transfer March 31, 2017 (planned)
7. Extraordinary Loss and Future Prospect
As a consequence of the above-mentioned transactions, Tokuyama Malaysia will be excluded from the
consolidation of Tokuyama. With the transfer of Tokuyama Malaysia to OCI, it is expected that around 8
billion yen of loss on business transfer will be recorded as the extraordinary loss during the fourth quarter of
the fiscal year ending March 31, 2017, however, the total amount of loss would be changed due to the
performance of Tokuyama Malaysia until the exclusion from the consolidation or other factor. The tax
expense for the fiscal year ending March 31, 2017 is expected to be reduced by around 8 billion yen as a result
of above transactions.
Any impact of the share transfer on Tokuyama’s consolidated financial results for the fiscal year ending
March 31, 2017, is currently being assessed. If and when a material impact is expected, Tokuyama will make a
timely announcement as the impact is fixed.
3
1 Transfer of Shares in Tokuyama Malaysia
1. Overview2. Background3. Impact on Results
for the Current Period
5. Summary
4. Impact on Medium-termManagement Plan
4
1. OverviewTransfer of Shares in Tokuyama Malaysia1
(1) Tokuyama Malaysia will undertake the issuance of new shares by way of a third-party allotments to OCINumber of shares to be issued:First allotment: 50,000,000 shares (Tokuyama’s shareholding after the allotment: 83%)Second allotment: 210,000,000 shares (Tokuyama’s shareholding after the allotment: 49%)Amounts of procurement funds: First allotment: US$ 24 million Second allotment: US$ 78 millionPayment date:First allotment: October 7, 2016 (planned)Second allotment: March 31, 2017 (planned)
(2) Tokuyama Corporation will transfer all of its shares in Tokuyama Malaysia to OCINumber of shares to be transferred: 252,356,839 shares (Number of shares after the transfer: 0 shares)Amounts of procurement funds: US$98 millionDate of share transfer: March 31, 2017
With a resolution at a meeting of Board of Directors held today, Sep 28, 2016, Tokuyama Corporation decided to transfer its shares in Tokuyama Malaysia Sdn. Bhd, its consolidated subsidiary, to OCI Company Ltd. (OCI), South Korea
As a result of the aforementioned, Tokuyama Malaysia will be excluded from the Company’s scope of consolidation from April 2017.
5
Outline of the consolidated subsidiary whose shares are to be transferredName: Tokuyama Malaysia Sdn. Bhd.Location: Samalaju Industrial Park, Sarawak, MalaysiaRepresentative: Hiroshi Nomura, President and Representative DirectorBusiness: Production and sale of polycrystalline siliconCapital: 6.5 billion yenDate of Establishment: August 18, 2009Major Shareholder: Tokuyama Corporation (Ratio of shareholding: 100%)Sales: 8.8 billion yen (Fiscal year ended March 2016)
Outline of the other party of the third-party allotment and the share transferName: OCI Company Ltd.Location: 94, Sogong-ro, Jung-gu, Seoul, KoreaRepresentative: Lee Woo Hyun, President and Representative DirectorBusiness: Production and sales of inorganic chemicals, petro and coal chemicals, fine chemicals,
and raw materials for solar panelsCapital: 127.2 billion Korean WonDate of Establishment: August 5, 1959Total assets: 7,298.7 billion Korean Won (Fiscal year ended December 2015)
1. Overview1 Transfer of Shares in Tokuyama Malaysia
After evaluating the merits of a business alliance with OCI, a company that is active across a broad range of fields in the solar cell market, the transfer of shares in Tokuyama Malaysia to OCI was considered the best option for further developing the business.
6
Tokuyama Malaysia was established with the aim of expanding the Group’s polycrystalline silicon business in 2009. Despite the construction of the PS-1 and PS-2 plants, impairment losses for virtually the entire book values of both plants have been incurred due to engineering issues with regard to plant facilities and the substantial deterioration in polycrystalline silicon market conditions.
While steps have been taken to secure productivity by promoting improvements in facilities and other measures in an effort to ensure the ongoing viability of Tokuyama Malaysia, evaluation of various options including alliance with other companies was made aiming at further strengthening Tokuyama Malaysia’s business structure.
2. Background1 Transfer of Shares in Tokuyama Malaysia
7
Date of the first third-party allotment (October 7, 2016, the third quarter of the current accounting period)
•There is no impact on results
Date of the second third-party allotment and transfer of equity interest (March 31, 2017, the fourth quarter of the current accounting period)
•While an extraordinary loss of approximately ¥8.0 billion in connection with the business transfer of Tokuyama Malaysia is projected, the actual amount of the loss may change as a result of such factors as the future performance of Tokuyama Malaysia.
•Decrease in income taxes of approximately ¥8.0 billion as a result of this undertaking is projected in the current accounting period.
3. Impact on Results for the Current Period
The Company is currently taking steps to review its consolidated financial results forecasts for the fiscal year ending March 31, 2017. Details will be disclosed in a timely manner should any revision to financial results forecasts arise.
1 Transfer of Shares in Tokuyama Malaysia
8
4. Impact on Medium-term Management Plan
While the share transfer will have a certain effect on the target indicators of the Medium-Term Management Plan (decreased net sales of ¥18 bn and decreased operating income of ¥2 bn in FY2020), we will look to minimize any downside impact through the reallocation of management resources and work to secure improvements in excess of targets.In addition, free cash flow will be improved as a result of decreased tax expenses of Tokuyama Corp in connection with the business transfer and other factors
1
Items Numerical Targets (FY2020)(May 12, 2016)
Profit and lossNet sales ¥335.0 billion
Operating income ¥36.0 billion
Financial position
ROA 10%
Total asset turnover 1.0 times
CCC 55 days
D/E ratio 1 times
Cash flows Free CF (5 years) Approx ¥100.0 billion
Transfer of Shares in Tokuyama Malaysia
9
While a loss will be incurred as a result of the business transfer, this undertaking is expected to generate the following benefits.
Enable the Company to definitively reduce the volatility of financial results and rebuild its financial position
Enable the Company to direct management resources to core businesses that can better harness its strengths including unique technologies
Enable the Company to improve its cash flows for certain period by taking advantage of the benefits related to taxation and others
Tokuyama will accelerate efforts to rebuild its financial platform and expand earnings, priority measures under its medium-term management plan. As we work toward achieving these goals, we kindly request the continued support and understanding of stakeholders.
5. Summary1 Transfer of Shares in Tokuyama Malaysia
12
2 Supplementary Data
1. Polysilicon MarketSupply-demand forecast of polysilicon
Supply capacity/Demand (tonnes) *Tokuyama estimate
Demand (Solar cells)
Demand (Semiconductors)
Supply capacity of other producers
Supply capacity of major producers
Forecasts
<Semiconductor-grade polysilicon demand>•Demand projected to increase on the back of higher functionality of mobile devices<Solar-grade polysilicon demand>•A new framework regarding reductions on CO2 emissions in Paris Agreement is expected to generate favorable conditions•Despite a substantial decline in installed PV capacity in Europe and certain other areas, the projected annual increase in demand is around 10% largely reflecting forecast growth due to aggressive installation initiatives in such countries as China, the U.S. and India
<Supply side>•Excess supply capacity expected to continue for the foreseeable future; cost competitiveness recognized as the key to survival
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
2013 2014 2015 2016 2017 2018 2019
10
12
14
16
18
20
22
24
26
28
30
2012/4/4 2012/8/4 2012/12/4 2013/4/4 2013/8/4 2013/12/4 2014/4/4 2014/8/4 2014/12/4 2015/4/4 2015/8/4 2015/12/4 2016/4/4 2016/8/4
102030405060708090
100
2009/7 2010/7 2011/7 2012/7 2013/7 2014/7 2015/7 2016/7
13
(US$/KG)
2 Supplementary Data
Solar-cell grade Polysilicon Spot Price Trend
Source:PV insights
1. Polysilicon Market
14
2 Supplementary Data
2. PV MarketForecasts of installed PV capacity by region
Unit:GW
Europe ROWN. AmericaAsia
0
10
20
30
40
50
60
70
80
2013 2014 2015 2016 2017 2018 2019
Conditions in each country
<China>Achieved a cumulative solar cell output total of 43.18GW as of the end of 2015;
secured the global top position surpassing GermanyProjected capacity installed in 2016 to be 18.1GW (20% increase yoy)Identify renewable energy as one of eight major items in the energy field under
the 13th five-year plan; expectations of a further increase in solar cell demand over the long term
<U.S.>Investment tax credit (ITC) extension passed by the U.S. Congress; expectations
of an increase in the amount of solar power generation system installation by 2020
<Japan>Since the launch of the existing feed-in tariff system in July 2012, Japan has
witnessed a rapid surge in the amount of solar power generation introductionInstalled capacity in 2015 came to 9.8GW (8.6GW in 2014)Stable installation can be expected though further market expansion is not
anticipated.<India>
The Modi government announced plans to target an installed capacity of 100GW by 2022
Policy in place to authorize new clean energy targets (ratio of renewable energy in 2030 of 40%: solar cells approx. 250GW)<Europe>
Expectations of moderate growth over the medium to long term despite the impact of the successive shrinking and termination of policy support measures
*Tokuyama estimate
top related